FASB Agrees To Look At Pension Accounting

March 12, 2003 (PLANSPONSOR.com) - The Financial
Accounting Standards Board (FASB) has agreed to take a closer
look at pension accounting by voting today to add it to its
formal agenda of items for review.

The accounting rulemaker said the agenda addition,
in response to a plethora of complaints received recently
about current pension accounting standards, will focus
specifically on how to enhance companies’ disclosure of
their pension finances to address growing concern by
investors and others.

The current rule governing pension accounting
standards, FAS No 87, has come under fire for its
language regarding “smoothing.” (See
Smooth Move
) Smoothing allows companies to take certain assets
and obligations off balance sheets and amortize them as
income or expenses over time. Additionally,
companies may be allowed to report their expected return
on assets, instead of actual losses and gains.

Critics of FAS No 87 argue the rule should be amended
to require more frequent pension finance reporting from
companies.
Currently, companies are only required to report
those figures annually (See
Finance Pros Say Pension Rules Need
Change
).